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Payrolls & Individual Taxes in Latvia
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There is a flat 23% rate applicable on employment income after deducting non-taxable allowance as well as allowance for dependent persons. In addition, social insurance contributions shall be made for any employment or similar income.

Employment income

Employment income includes:

  • Salary
  • Bonuses
  • One-off or systematic remuneration, or
  • Other income received by an employee on the bases of his current or previous employment relations, including unrepaid loans after 5 years in excess of EUR 1500.

Any remuneration paid based on consultancy- or another type of the service agreement will be regarded and taxed in the same manner as employment income if there exists at least one the criteria of employment income as listed by the Personal Income Tax Act. Labour law provides slightly different definition of employment income used for other purposes.


Unless particular income is classified as tax-exempt under the Personal Income Tax Act or considered as capital income or capital gains, which are taxed at 10-15% capital income tax rates, it will be subjected in Latvia to 23% personal income tax.


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